The field of the invention relates generally to systems and methods for processing electronic payments and, more particularly, to network-based systems and methods for processing cross-border transactions denominated in more than one currency.
A global economy requires the movement of funds across borders and across disparate currencies. International suppliers of goods and services often provide invoices to customers for payment. However, incoming payments often do not include an invoice number, requiring the supplier to manually match incoming payments to outstanding invoices, a process that can be inefficient, costly, and cumbersome.
In addition, some known payment systems do not allow the direct transfer of funds from one financial institution to another. A network of financial institutions and correspondent banks exists to forward funds from one institution to another. For example, a single payment being made from a small bank in the United States to a small bank in Germany may be passed from the small U.S. bank to a larger bank in the U.S. that serves as a correspondent bank, then to a German correspondent bank associated with the small German bank, and finally to the small German bank. This complex network is prone to delays and unpredictability. Moreover, each bank involved in the transaction may take a fee from the transferred funds. Foreign exchange rates and fees may also be applied by intermediary banks, adding more costs and unpredictability to the process.
Accordingly, a system is needed that enables cross border payments without the use of correspondent banks. Moreover, a system is needed that adds cost predictability, transaction tracking, and detailed remittance data that can be associated with each transaction to facilitate matching payments with invoices.